The housing savings plan has been a staple in the cultural banking landscape since its creation in 1969. According to the Banque de France’s annual report, some 13.4 million PELs were open at the end of 2019. Nearly 20% of French people have them. a. And the oldest holders have no interest at all in closing their portfolio.
Open to everyone
Anyone, major and even minor, can hold a PEL and only one. All you need to do is make an initial payment of 225 euros when opening this account, which must then be funded for at least four years, under penalty of penalties (recalculation of the rate and loss of the right to a loan. advantageous) in the event of early withdrawal. The legislation requires you to top up your plan by paying a minimum of 540 euros per year, knowing that the PEL is capped at 61,200 euros (excluding capitalized interest).
For simplicity, your contract fixes the amount of periodic payments that you can make: 45 euros per month or 135 euros per quarter or 270 euros per semester, in general. You can fund your home savings plan for a maximum of ten years. And, beyond that, it continues to generate interest for another five years. However, any withdrawal, whatever its date, results in its closure. All of your capital is therefore immobilized until it is used.
Little attractiveness … at first glance
This binding operation was originally intended to encourage young people to build up regular and forced savings, in order to finance a first real estate purchase. In fact, the great advantage of the PEL was previously to obtain a loan at a preferential rate from its bank. Except that the credit rate linked to the home savings plan has been no longer competitive for a long time, not to mention that its terms involve supplementing it with a classic loan, resulting in smoothing costs.
Since the 2000s, banks have therefore presented it primarily as a savings product. Downside: it too suffered from the erosion of interest rates. And since 2016, its performance has not been very exciting: only 1%, a little more than its cousin the livret A (0.5% in 2021). To top it off, while this portfolio was formerly tax-exempt, interest on PELs opened since 2018 is subject to income tax and social security contributions through the application of the progressive scale or the single lump-sum deduction of 30%.
A high rate of return
With an outstanding amount of 282.5 billion euros at the end of 2019, including 115.5 billion in funds placed on plans opened before 2011, the ELP has not yet said its last word … Indeed, the more your home savings plan is. older, the more attractive it is, since the interest rate set at opening remains guaranteed until closing.
And precisely, according to the report of the Banque de France, 44% of the accounts showed a level of remuneration of 2.5% (rate applied for an opening between 2003 and 2015) at the end of 2019. Better still, 5% had a rate at less equal to 5.25% (before the 2000s). Record returns in the market, especially without the risk of capital loss. The holders of the oldest contracts therefore obviously have every interest in keeping their PEL, as long as the legislation allows them to do so.
Contracts without term
If the high level of remuneration of the oldest housing savings plans is a boon for their holders, it is a significant burden for the banks and a source of funding in less for the economy. This is why the law has limited their period of detention. Thus, plans opened from March 2011 are automatically transformed into classic savings accounts at the end of the 15th year, subject to a new rate of remuneration set by the bank.
But accounts prior to this key date benefit from beneficial regulation, as they continue to earn interest indefinitely until funds are withdrawn. In order to remedy this, the Banque de France has also proposed to apply a single rate of return of 1% to them. But this is not yet relevant.